INCOME TAX OFFICER 20(2)(3), MUMBAI V. OM SHANTI HOUSEING, MUMBAI

ITA 5614/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8015 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMA
• Assessee Lawyers: B V JHAVERI
• Keywords: Unexplained cash credit; Source of fund; Retrospective amendment; Question of law; Accommodation entries; Onus to prove; TDS
• Section: 271(1)(c); 234B; 133(6); 201; 274; 208; 13; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH MUMBAI BEFORE SHRI C.N.PRASAD, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.5613/MUM/2017 ( ASSESSMENT YEAR: 2013-14 ) ITO-20(2)(3) ROOM NO.210 PIRAMAL CHAMBER, LALBAUG MUMBAI-400 012 VS. OM SHANTI RESIDENCY 9/A, CHUNAWALA COMPOUND PAREL TANK ROAD KALACHOWKI MUMBAI-400 033 PAN/GIR NO. AABFO2195D APPELLANT ) .. RESPONDENT ) & ITA NO. 5614/MUM/2017 ( ASSESSMENT YEAR: 2013-14 ) ITO-20(2)(3) ROOM NO.210 PIRAMAL CHAMBER, LALBAUG MUMBAI-400 012 VS. OM SHANTI HOUSING 9/A, CHUNAWALA COMPOUND PAREL TANK ROAD KALACHOWKI MUMBAI-400 033 PAN/GIR NO. AABFO 4424B APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI B.V. JHAVERI, AR REVENUE BY SHRI KUMAR PADMAPANI BORA, AR DATE OF HEARING 1 9/11 /201 9 DATE OF PRONOUNCEME NT 10 / 01 /20 20 / O R D E R PER G.MANJUNATHA (A.M) : THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE LD. COMMISSI ONER OF INCOME TAX (APPEALS)-32, MUMBAI, BOTH DATED 20/06/2017 AND THEY PERTAINS TO AYS 2013-14. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 2 COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED- OFF, BY THIS CONSOLIDATE D ORDER. ITA.NO.5613/MUM/2017:- 2. THE REVENUE HAS, MORE OR LESS RAISED COMMON GROU NDS IN BOTH APPEALS. THEREFORE, FOR THE SAKE OF BREVITY, THE GR OUNDS OF APPEAL FILED IN ITA NO.5613/MUM/2017 ARE REPRODUCED AS UND ER:- (I) 'ON THE FACTS AND CIRCUMSTANCE OF CASE A ND IN LAW, THE LD. CIT(A) ERRED IN GRANTING RELIEF WITH REGARDS TO THE ADDITI ONS MADE U/S 68 OF THE INCOME TAX ACT, 1961 IGNORING THE FACTS THAT ASSESS EE FAILED TO PROVE THE GENUINENESS OF THE CREDITS CLAIMED TO HAVE AVAILED BY THEM.' (II) ON THE FACTS AND CIRCUMSTANCE OF EASE A ND IN LAW, THE LD CIT(A) ERRED IN GRANTING RELIEF WITH REGARDS IN THE ADDITI ONS MADE U/S 68 OF THE INCOME TAX ACT, 1961 IGNORING THE FACTS THAT CREDIT ORS WHO WERE CLAIMED TO HAVE ADVANCED LOANS ARE SHOWING MEARGE INCOME AN D HENCE LACK OF CREDITWORTHINESS .' (III) 'ON THE [ACTS AND CIRCUMSTANCE OF CASE AN D IN LAW, THE LD CIT(A) ERRED IN GRANTING RELIEF U/S 68 OF THE INCOME TAX A CT, 1961 IGNORING THE FACTS THAT APEX COURT IN THE CASE OF SUMATI DAYAL V S CIT (1995) 214 ITR 801 (SC) STATED THAT BURDEN OF PROOF FOR ESTABLISHI NG THAT THE CASH CREDITS DOES NOT CONSTITUTE THE INCOME OF THE ASSESSEE COMP LETELY LIES ON THE ASSESSEE AND THAT THE ASSESSEE'S EXPLANATION WITH R EGARD TO THE CASH CREDITS NEEDS TO BE CONSIDERED IN VIEW OF THE HUMAN PROBABILITIES. 1 ' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROPERT Y DEVELOPMENT, FILED ITS RETURN OF INCOME FOR AY 2013-14 ON 28/09/ 2013, DECLARING TOTAL INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD . AO NOTICED THAT THE ASSESSEE HAS TAKEN UNSECURED LOANS FROM FI VE PARTIES, AS PER REPORT OF TAX AUDITOR AND ACCORDINGLY, CALLED U PON THE ASSESSEE TO EXPLAIN NATURE OF LOANS ALONG WITH DOCUMENTARY E VIDENCES. IN RESPONSE, THE ASSESSEE HAS FILED CONFIRMATION LETTE RS FROM ALL PARTIES ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 3 ALONG WITH ITR AND RELEVANT PAGE OF THE BANK STATEM ENT. IN ORDER TO VERIFY THE IDENTITY, GENUINENESS AND CREDITWORTHINE SS OF THE CREDITORS, NOTICES U/S 133(6) WAS ISSUED. HOWEVER, NOTICES ISS UED IN RESPECT OF M/S. KANIKA GEMS PVT. LTD, RADEY JAGADAMBA SHAKTI G EMS PVT.LTD. WERE RETURNED UNSERVED. THEREAFTER, THE LD. AO CALL ED UPON THE ASSESSEE TO FILE COMPLETE POSTAL ADDRESS OF LENDERS FOR WHICH THE ASSESSEE HAS FILED NEW BUSINESS ADDRESS OF ALL THE PARTIES. FURTHER, THE LD. AO HAD ISSUED COMMISSION U/S 131(1)(D) TO D DIT(INV.), SURAT FOR VERIFICATION OF FOUR LENDERS FOR WHICH THE DDIT (INV.) SURAT HAD ISSUED SUMMONS TO FOUR PARTIES, BUT SAME COULD NOT BE SERVED. THE LD. AO, ON THE BASIS OF INFORMATION FILED BY THE AS SESSEE COUPLED WITH ENQUIRIES CONDUCTED DURING THE COURSE OF ASSES SMENT PROCEEDINGS, CAME TO THE CONCLUSION THAT THE ASSESS EE HAS FAILED TO PROVE THE IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES, IN RESPECT OF UNSECURED LOANS TAKEN FROM FIVE PARTIES. HE FURTHER OBSERVED THAT ON PERUSAL OF FINANCIAL ST ATEMENTS OF LENDERS FILED BY THE ASSESEE, ALL FIVE LENDER COMPA NIES HAVE MEAGRE CAPITAL AND NOMINAL INCOME DECLARED IN THEIR RESPEC TIVE RETURNS OF INCOME. FURTHER, THE LENDER COMPANIES HAVE SHOWN HU GE TURNOVER IN THE DIAMOND BUSINESS, BUT WHEN IT COMES TO PROFIT, THE PROFITS SHOWN IS NEGLIGIBLE, WHEN COMPARED TO TURNOVER DECLARED F OR THE YEAR. THE LD. AO HAS ALSO ANALYSED THE BALANCE SHEET AND NOTE D THAT EXCEPT RECEIVABLES AND PAYABLES, NO OTHER IMPORTANT ASSETS IN THE COMPANIES. THEREFORE, HE OPINED THAT ALL THOSE COMP ANIES ARE PAPER COMPANIES AND DOES NOT HAVE REQUIRED CAPACITY TO EX PLAIN SOURCE OF INCOME TO SUPPORT LOANS GIVEN TO THE ASSESSEE AND A CCORDINGLY, CAME TO THE CONCLUSION THAT UNSECURED LOANS TAKEN F ROM FIVE PARTIES ARE NON GENUINE TRANSACTIONS AND ACCORDINGLY, BY FO LLOWING CERTAIN JUDICIAL PRECEDENTS, MADE ADDITIONS TOWARDS UNSECUR ED LOANS U/S 68 OF THE I.T.ACT, 1961. FURTHER, THE LD. AO HAD ALSO MADE ADDITIONS ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 4 TOWARDS INTEREST PAID ON SAID LOANS, ON THE GROUND THAT WHEN, LOAN ITSELF IS A NON GENUINE TRANSACTIONS, CORRESPONDING INTEREST PAID THEREON CANNOT BE CONSIDERED AS GENUINE TRANSACTION S. THE RELEVANT FINDINGS OF THE LD. AO ARE AS UNDER:- 4.6 I HAVE CAREFULLY GONE THROUGH VARIOUS AFORES AID SUBMISSIONS MADE FROM TIME TO TIME ALONG WITH THE DOCUMENTS ANNEXURE HERETO. MY OBSERVATIONS/FINDINGS ARE AS UNDER: 4.7 SINCE THE PROVISIONS OF SECTION 68 IS GOING TO PLAY VITAL ROLE IN DETERMINING THE ASSESSED INCOME OF THE ASSESSES, IT IS BEING REPRODUCED FOR THE READY REFERENCE AS UNDER ; 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSES MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSES OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER SATISF ACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSES OF THAT PREVIOUS YEAR.' 4.8 ON A. CAREFUL EXAMINATION OF THE CONTENT OF T HE SAID SECTION, IT IS CLEARLY NOTICED THAT THE BASIC INGREDIENTS REQUIRED FOR BEING AWAY FROM THE APPLICABILITY OF THE PROVISIONS OF SECTION 68 ARE A S UNDER : I. GENUINENESS OF THE TRANSACTION II. IDENTITY OF THE LENDER III. CREDITWORTHINESS OF THE LENDER IV. MODES OPERANDI OF THE LENDER 4.9 ON EXAMINING THE ABOVE INGREDIENTS WITH THE DOCUMENTS ANNEXED TO THE COVERING LETTER OF ALL THE FOUR LENDERS OF L OAN IT IS NOTICED AS UNDER : I. ALL THE FIVE LENDERS HAPPENED TO BE PRIVATE L IMITED COMPANIES II. ON VERIFICATION OF THE RETURN OF INCOME OF THE LENDERS IT IS NOTICED AS UNDER: S.NO . NAME OF THE LENDER A.Y, RETURNED INCOME (IN RS.) AMOUNT OF SHARE CAPITAL & RESERVES IN RS.) 1 SHRI JAGDAMBA SHAKTI GEMS PVT.LTD. 2013-14 39,960/- 1,42,722 2 RAD HEY KRISHNA GEMS PVT.UD. 2013- 14 1,04,590/- 2,66,079 3 SIDDHAM GEMS .PVT.LTD. 2013-14 77,53 1/- 1,95,082 ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 5 4 MANGALMURI IMPEX PVT.LTD. 2013-14 1,06,360 3,86,428 5 KANIKA GEMS PVT.LTD. 2013-2014 1,70,620/- COPY OF B/S. P&L ACCOUNT NOT SUBMITTED ON VERIFICATION OF THE RETURN OF INCOME, PROFIT & L OSS ACCOUNT, BALANCE SHEET OF THE LENDERS IT IS SEEN THAT ALL FIVE LENDE RS ARE HAVING VERY MEAGRE PAID CAPITAL AND RESERVES AND THE INCOME DECLARED I N THE RETURN OF INCOME IS ALSO QUITE NOMINAL. III. THESE CONCERNS ARE NOT AN N.B.F.C. THEY ARE D EALING IN DIAMOND BUSINESS, IV. FURTHER ON VERIFICATION OF DETAILS OF THE MONEY LENDERS IT IS SEEN THAT ASSESSEE IS SHOWING HUGE TURNOVER AND VERY LOW OR NEGLIGIBLE PROFIT. THE DETAILS ARE UNDER : SR.NO , NAME OF THE PARTY A.Y. TOTAL TURNOVER PROFIT 1 RADHEYKRISHN A GEMS PVT,LTD. 2012-13 1,53,54,31,966 62,660 -DO- 2013-14 94,62,51,016 1,07,991 2 SIDDHAM GEMS PVTLTD. 2012-13 39,54.75,669 67,226 -DO- 2013-14 62,63,10,094 77,531 3 MANGALMURTI IMPEX PVTLTD. 2012-13 92,26,45,755 1,39,918 -DO- 2013-14 78,27,51,096 1,04,084 4 SHRI JAGDAMBA SHAKTI GEMS PVT.LTD. 2012-13 47,54,62.942 21,873 -DO- 2013-14 2-87,24,16,178 39,955 5 KANIKA GEMS PVT.LTD 2012-13 FROM THE DATA REPORTED IN THE ABOVE CHART BASED PUR ELY ON AUDITED ACCOUNTS, IT IS CLEARLY VISIBLE THAT THE LENDERS WERE INDULGING NOT IN REAL DIAMOND TRADING BUSINESS BUT SIMPLY ACTING AS AN ACCOMMODATION ENTR Y PROVIDER, KEEPING IN MIND THAT THE SHARE CAPITAL OF ALL THE FIVE LENDERS PVT. LTD. COMPANIES WERE HARDLY RS. 1,00,000/- WITH WHICH ONLY AN UNIMAGINAB LE TURNOVER RUNNING INTO CRORES WERE REPORTED TO THE I,T. DEPARTMENT, NOT FO RGETTING ALSO THE VITAL FACT THAT NONE OF THE LENDERS DID BORROW EITHER ON SHORT TERM OR LONG TERM BASIS EVEN A SINGLE RUPEE TO REPORT SUCH A HUGE TURNOVER. THUS I T IS PROVED THAT THESE ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 6 CONCERNS ARE NOT HAVING ANY SHARE CAPITAL OR PROFIT TO ADVANCE MONEY TO OTHER CONCERNS. FURTHER THESE ARE NOT A N.B,F,C. CONCERN SO THAT MONEY COULD BE ADVANCED OUT OF BORROWING FUND WHICH IS PROVED BY THE FACT THAT THEIR BUSINESS IS DIAMOND TRADING:- V. ALL THE FIVE LENDERS ARE HAVING HUGE AMOUNT OF T RADE PAYABLES AND RECEIVABLES REMAINING OUTSTANDING AT THE YEAR END. VI. ALL FIVE LENDERS WERE INDULGING IN THE SAME LIN E OF BUSINESS I.E,DIAMOND MANUFACTURERS, EXPORTERS FE IMPORTERS. VII.ALL THE FIVE LENDERS HAVE ADVANCED VERY HUGE SU M BY WAY OF LOANS WITHOUT OBTAINING ANY SECURITY TO SECURE THEIR HARD EARNED MONEY* VIII. NOTICE OF THE LENDERS HAVE PROVED THEIR IDENT ITY BY FILING PHOTOCOPY OF PAN CARD, MEMORANDUM AND ARTICLES OF ASSOCIATION AN D RESOLUTION AUTHORIZING CHANGE IN BUSINESS ADDRESS. NOT ONL Y THIS, NONE OF LENDERS HAVE FILED PHOTOCOPY OF THE DOCUMENTS FILED WITH TH E REGISTRAR OF COMPANIES AMENDING THE BUSINESS ADDRESS, IX. NONE OF THE LENDERS HAVE FILED MEMORANDUM AND A RTICLES OF ASSOCIATION REGARDING THE MAIN OBJECT OF THE FIRM X. . THE ASSESSING OFFICER-20(3)-L, MURNBAI VIDE LETTER DATED 28.03.2016 HAS GIVEN INFORMATION THAT A COMMISSION U/S 131(1)( D) WAS ISSUED TO DDIT(LNV.), SURAT FOR VERIFICATION OF THE FOLLOWING LOAN LENDERS: 1. M/S.KAUSHALI IMPLEX PVT.LTD. 2. M/S.RADHEKRISHNA GEMS PVT.UD. 3. M/S.SHANKESHWAR DIAMONDS PVT.LTD, 4. M/S.CHARBUJA DIAMONDS PVT.LTD. THE DDIT(INV,), UNIT-I, SURAT VIDE LETTER DATED 23. 02.2016 STATED THAT SUMMONS U/S.131 OF THE ACT WAS ISSUED TO THE ABOVE MENTIONED PARTIES BUT THE SAME COULD NOT BE SERVED AS THE PREMISE WAS FOUND CLOSED. THEREFORE THE SUMMONS WAS SERVED BY AFFIXTURE ON TH E SAID ADDRESSES. THE LOAN CREDITORS HAS NOT RESPONDED TO THE SUMMONS U/S, 131 OF THE I.TAX ISSUED BY THE DDIT(LNV.) UNIT-1, SURAT ON APP OINTED DATED. XI. THE HONBLE ITAT INDORE BENCH IN THE CASE OF A GRAWAL COAL CORPORATION(P).LTD. VS. ADDL-COMMISSIONER OF INCOME TAX, RANGE-5 (2012) 19 TAXNIANN.COM 209 HAS HELD THAT WERE COMPA NY WERE FOUND TO BE NON-EXISTENT RESIDENT AT ADDRESSES GIVEN BY ASSE SSEE AND SUMMONS/NOTICES ISSUED TO THEM WERE RETURNED BACK U NNERVED AND ALSO ASSESSEE FAILED TO PRODUCE ANY OF DIRECTORS OR EMPL OYEES OF THOSE SHARE APPLICANTS, INITIAL ONUS IS UPON THE ASSESSEE UNDER SECTION 68 TO PROVE IDENTITY OF SHARE APPLICANTS COULD NOT BE SAID TO H AVE BEEN DISCHARGED BY ASSESSEE. XII. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. PRECISION FINANCE PVT,LTD.(1994) 208 ITR 465(CAL) HAS HELD TH AT IT IS FOR THE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITORS , THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. MERE FURNI SHING OF PARTICULARS IS NOT ENOUGH. XIII. THE HONBLE MADRAS HIGH COURT IN THE CASE OF MANGILAL JAIN VS ITO 315 ITR 105 HEDL THAT MERE PROOF OF IDENTITY OF CRE DITOR OR THAT TRANSACTION WAS BY CHEQUE IS NOT SUFFICIENT. THE ASSESEE HAS TO PROVE THE GENUINENESS OF THE MONEY LENDERS ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 7 XIV.. THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE DR.D.SIVA SANKARA RAO VS. INCOME TAX OFFICER, WARD-2, ELURU ( 2013) 29 TAXMANN,COM 17 HAS HELD THAT WHERE ONLY IDENTITY OF CREDITOR IS ESTABLISHED BUT HIS/HER CREDITWORTHINESS AND GENUIN ENESS OF TRANSACTION IS NOT PROVED THEN ADDITION IS TO BE MADE FOR PURPO SE OF SECTION 68 CASH CREDITS. 4,10. IN VIEW OF THE FOREGOING OBSERVATIONS AND FIN DINGS, IT IS CLEARLY NOTICED THAT ALL THE FIVE LENDERS HAVE FAILED IN PR OVING THEIR IDENTITY AND CREDITWORTHINESS THEREOF. THEREFORE, I AM CONSTRAIN ED TO COVER THE FRESH LOANS OBTAINED DURING THE YEAR FROM ALL THE FIVE LE NDERS WITHIN THE AMBIT OF PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT 1961 WHICH AGGREGATES TO RS. 5,51,00,000/-WHICH IS THEREFORE BEING ADDED U/S .68 AS UNEXPLAINED CASH CREDIT TO THE TOTAL INCOME RETURNED. SINCE BOR ROWED LOANS FROM FIVE LENDERS ARE BEING ADDED BACK, THE AGGREGATE AMOUNT OF RS, 40,03,550/- OF INTEREST PAID THEREON IS ALSO HEREBY SIMULTANEOU SLY ADDED TO THE TOTAL INCOME RETURNED. PENALTY PROCEEDINGS FOR CONCEALING AN INCOME OF RS. 5,5100,000/- AND RS. 40,03,550/-- FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME IS HEREBY SEPARATELY INITIATED SUBJECT TO THE ABOVE REMARKS AND AFTER VERIFICATION OF DETAILS FILED AND AFTER DISCUSSION WITH REPRESENTATIVE OF THE ASSESSE E, THE TOTAL INCOME IS COMPUTED AS UNDER : (IN RS.) INCOME FROM BUSINESS NIL ADD: DISALLOWANCE AS PER PARA 4 DISCUSSED 5,91,03,550 TOTAL INCOME 5,91,03,550 ASSESSED U/S,143(3) OF THE INCOME-TAX ACT,L961. CRE DIT FOR PREPAID TAXES IS GIVEN AFTER DUE VERIFICATION. INTEREST U/S 234A, 234B AND 234C IS CHARGED AS PER LAW. THE INTEREST IS CHARGED AS PER ITNS 150 WHICH FORMS PART OF THE ORDER. DN/RO IS ISSUED ACCORDINGLY. PEN ALTY NOTICE U/S, 271(1)(C) R.W.S. 274 OF THIS ACT IS ALSO ISSUED 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS ON THE ISSU E ALONG WITH CERTAIN JUDICIAL PRECEDENTS, WHICH HAS BEEN REPRODU CED AT PARA 4 ON PAGE 3 TO 14 OF LD.CIT(A) ORDER. THE SUM AND SUBSTA NCE OF THE ARGUMENTS OF THE ASSESSEE BEFORE THE LD.CIT(A) ARE THAT LOANS TAKEN FROM FIVE PARTIES ARE GENUINE TRANSACTIONS, WHICH A RE SUPPORTED BY NECESSARY EVIDENCES. THE ASSESEE HAS FILED ENORMOUS DETAILS TO ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 8 PROVE IDENTITY AND GENUINENESS OF TRANSACTIONS. THE LOANS HAVE TAKEN THROUGH PROPER BANKING CHANNELS. THE ASSESEE HAS PAID INTEREST AFTER DEDUCTING APPLICABLE TDS AS PER LAW. FURTHER, THE SAID LOANS HAVE BEEN REPAID IN SUBSEQUENT FINANCIAL YEAR . THEREFORE, THE LD. AO WAS INCORRECT IN MAKING ADDITIONS TOWARDS UN SECURED LOANS ONLY ON THE BASIS OF NON COOPERATION OF THE LENDERS , IN RESPONSE TO 133(6) NOTICES AND 131(1)(D) COMMISSION ENQUIRY CO NDUCTED BY DDIT(INV.), SURAT. 5. THE LD.CIT(A) AFTER CONSIDERING RELEVANT SUBMISS ION OF THE ASSESSEE AND ALSO BY TAKING NOTE OF VARIOUS FACTS B ROUGHT OUT BY THE ASSESEE DURING THE APPELLATE PROCEEDINGS HELD THAT TRANSACTIONS BETWEEN THE ASSESSEE AND LOAN CREDITOR ARE SUPPORTE D BY NECESSARY EVIDENCES, INCLUDING CONFIRMATION LETTERS FROM THE PARTIES. THE LD.CIT(A), FURTHER OBSERVED THAT ALTHOUGH, THE LD. AO HAS TAKEN SUPPORT FROM INVESTIGATION CONDUCTED BY THE DDIT(IN V.), BUT, ON PERUSAL OF REPORT OF DDIT(INV.), WHICH WAS NOTICED THAT DDIT (INV.) HAS NOT MADE ADEQUATE ENQUIRIES TO REACH TO THE CO NCLUSION THAT THE PARTIES ARE NON GENUINE. THE LD.CIT(A), FURTHER NOT ED THAT THE ASSESSEE HAS FILED NECESSARY EVIDENCES TO PROVE GEN UINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES. F URTHER, THE SAID LOANS HAVE BEEN REPAID THROUGH PROPER BANKING CHANN ELS IN SUBSEQUENT FINANCIAL YEARS. THEREFORE, HE OPINED TH AT ASSESEE HAS BEEN ABLE TO SATISFY ALL INGREDIENTS OF CASH CREDIT S I.E IDENTITY, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES AND ACCORDINGLY, DELETED ADDITIONS MADE BY THE LD. AO T OWARDS UNSECURED LOANS ALONG WITH INTEREST PAID THEREON U/ S 68 OF THE I.T.ACT, 1961. THE RELEVANT FINDINGS OF THE LD.CIT( A) ARE AS UNDER;- 5. DECISION . I HAVE CONSIDERED THE FACTS OF THE EASE, GROUNDS OF APPEAL AND ORAL AND WRITTEN SUBMISSIONS MADE BEFORE ME. A FTER A CAREFUL ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 9 CONSIDERATION OF THE SAME AS WELL AS THE ; ASSESSMENT ORDER. ALL GROUNDS OF APPEAL ARE CORRELATED THEREFORE 1 DEALT TOGETHER FOR SAKE OF ' CONVENIENCE. I PROCEED TO RULE AS UNDER. 5.1 FROM THE ASSESSMENT ORDER I FIND THAT A.O . MADE ADDITION U/S. 68 JOAN TAKEN FROM FOLLOWING 5 PARTIES VIZ. KANIKA GEM S PVT, LTD. RS, 1,80,00,000/-, MANGALMURTI IMPEX RS, : 1,00,00,000/-, SIDDHAM GEMS P. LTD. RS. 1,15,00,000/- RADHEY KRISHNA GEMS. P, LTD . RS. ' 1,10,00,000/- AND SHRI JAGDAMBA SHAKTI GEMS P. LTD. RS. 46,00,000/- TOTALING TO RS, 5, 5 1,00, 000/- . THE ADDITION HAS BEEN DONE B Y TREATING THE SAME AS UNEXPLAINED CASH CREDIT STATING THAT LENDERS ARE NO T GENUINE BECAUSE APPELLANT REMAIN FAILED TO PRODUCE THE PARTIES BEFO RE THE A.O. FOR VERIFICATION AND IDENTITY OF THE LENDERS AND CREDIT WORTHINESS WAS NOT PROVIDED BY THE APPELLANT. THE AO CAME TO THE CONCL USION THAT AS THE DECLARED INCOME BY THE RESPECTIVE LOAN CREDITORS WA S LESS THEY WERE NOT CAPABLE OF LENDING WHICH HAS BEEN DONE BY IGNORING THE FACT THAT THEY HAD SUBSTANTIAL TURNOVER AND HAD A VERY LARGE BASE OF ASSETS AS EVIDENT IN THE RESPECTIVE BALANCE SHEET. I FIND FROM THE ASSESSMENT ORDER OF THE A.Q., IN PA RA 4.2 IT HAS BEEN STATED THAT 'ASSESSES HAS FILED CONFIRMATIONS OF TH E ABOVE LOAN PARTIES ALONG WITH COPY OF ITR AND RELEVANT PAGE OF THE BAN K STATEMENT'. DURING THE ASSESSMENT PROCEEDINGS NOTICE U/S. 133(6) OF 2 PARTIES VIZ KANIKA GEMS PVT .LTD. AND SHREE JAGDAMBA SHAKTI GEMS PVT. LTD. WAS RETURNED FROM POSTAL AUTHORITIES WITH REMARK 'LEFT'. AS IT C AME TO NOTICE TO THE APPELLANT, HE PRODUCED THE NEW ADDRESS OF THE ALL L ENDERS FROM WHOM NOTICES RETURN UNSERVED. I FINE! FROM PARA 4.5 OF T HE ASSESSMENT ORDER WHEREIN AO HERSELF ACCEPTED THAT FINALLY ALL THE LE NDERS FILED CONFIRMATIONS. THE SAME EXTRACT IS AS UNDER: '4.5 THEREAFTER IN THIS CASE COMPLIANCE HAS BEEN MA DE BY ALL THE LENDERS OF LOAN BY SPEED POST FROM THE NEW BUSINESS ADDRESS '. I COME ON ME ISSUE OF COMMISSION ISSUED BY ANOTHER AO TO DDIT (INV.), SURAT. THE AO RECEIVED INFORMATION THAT ITO -20(3)(1),MUMBAI ISSUED COMMISSION TO DD1T, SURAT U/S, 131(L)(D) TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF LENDERS. THE DD IT(INV R ), SURAT SUBMITTED REPORT STATING THAT HE HAS ISSUED SUMMONS U/S. 131 FOR APPEARANCE BUT DUE TO CLOSE PREMISES SUMMONS COULD NOT BE SERVED, THEREFORE SUMMONS WERE SERVED BY AFFIXTURE BUT LOA N CREDITORS NOT RESPONDED. IN THIS CASE ONE PARTY NAMELY RADHE KRIS HNA GEMS PVT. LTD, IS RELATED TO THE PARTIES TO WHOM COMMISSION WAS IS SUED IN OTHER CASE. I FIND THAT REGISTERED OFFICE OF THE LENDERS HAS BEEN CHANGED. BEFORE ME APPELLANT SUBMITTED THAT CHANGED ADDRESS OF THE LEN DERS WERE PROVIDED TO THE AO DURING THE PROCEEDINGS. APPELLANT FILED BEFO RE ME PROOF OF CHANGE OF ADDRESS IN FORM OF FORM NO. 18 WHICH IS THE NOTI CE OF SITUATION OR CHANGE OF SITUATION OF REGISTERED OFFICE PURSUANCE TO SECTION 146 OF THE COMPANIES ACT ON VERIFICATION OF THE SAME IT IS NOT ICED THAT IN SR, NO. 4 IT IS CLEARLY MENTIONED 'NOTICE IS HEREBY GIVEN THAT ( A) THE ADDRESS OF THE REGISTERED OFFICE OF THE COMPANY WITH EFFECT FROM-- ---- PARTICULARS OF THE DETAILS ARE AS UNDER: SR. NO NAME OF THE COMPANY CHANGE ADDRESS WITH EFFECT ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 10 FROM RADHEY KRISHNA GEMS 6/1706, SAINAT H BUILDING, GUNDI SHERI, 29/04/2013 PVT. LTD. MAHAPURA, SURAT, GUJRAL-395003 ALL THE LENDERS ARE PVT. LTD. CO. ARE REGISTERED UN DER COMPANIES ACT ALL THE DETAILS OF COMPANY ARE AVAILABLE ON PUB LIC DOMAIN. ON THE ABOVE FACT I COME TO THE CONCLUSION THAT THE DDIT( LNV.), SURAT HAS NOT MADE ADEQUATE ENQUIRY NOR ANY ADEQUATE REPORT IS TA KEN ON RECORD BY A.O. ONLY ON THE BASIS OF THE PREMISES CLOSED ON ON E DAY OR NOTICES RETURNED FROM THE POSTAL AUTHORITY IT CANNOT HE ACC EPTED THAT PARTIES FROM WHOM THE LOANS WERE TAKEN ARE NOT IN EXISTENCE OR T HEY ARE BOGUS. THE DDIT(INV.) SURAT ISSUED /SERVED NOTICE ON THE OLD A DDRESS ; WHICH HAVE BEEN CHANGED. THEREFORE COMPLIANCE OF SUMMONS ISSUE D BY HIM COULD NOT BE . MADE. FINALLY ALL THE CONFIRMATION AND D ETAILS CALLED FOR WAS PROVIDED DURING THE ASSESSMENT' PROCEEDINGS AS WELL AS BEFORE ME. IT IS ALSO PERTINENT TO NOTE THAT IN THIS CAST NO COMMISS ION ' WAS ISSUED TO THE DDIT(LNV.) SURAT. AS NO COMMISSION WAS ISSUED IN TH IS CASE AND APPELLANT! PROVIDED THE CHANGE OF ADDRESS OF THE PARTIES DURING THE ASSESSMENT PROCEEDINGS, THIS CONTENTION WAS ALSO AC CEPTED BY THE AO IN HIS ORDER, THEN A.O SHOULD HAVE MADE ENQUIRY FOR ; ;HE SAME BUT HE DID NOT DO SO. BEFORE ME AS WELL AS THE A..O. ALSO DOCUMENTS WERE PRODUCED BY THE PARTIES TO PROVE THE GENUINENESS OF THE TRA NSACTIONS WHICH INTER ALIA INCLUDED THE CONFIRMATIONS, BANK STATEME NTS OF LENDERS, ACKNOWLEDGEMENTS ,ROI, FROM THESE PARTIES, THEIR BA LANCE SHEETS, PROFIT AND LOSS ACCOUNTS. STATEMENTS OF ADVANCES WHICH INC LUDED NAME OF THE APPELLANT AS BORROWER . IN TWO CASES AND DETAILS OF INTEREST AND PRINCIPAL REPAID WHICH WERE BY PAYEES ACCOUNT ; CHEQUES/RTGS. THE APPELLANT HAS FILED DETAILS FROM THE RECORDS OF MINISTRY OF CORPO RATE AFFAIRS WHICH ALSO SHOWS THAT LENDER COMPANIES ARE ALIVE. MOREOVER, TH E APPELLANT BAS 1 NOT, COMMENCED THE CONSTRUCTION OR DONE ANY BOOKING TO G ENERATE ANY FUNDS. HOWEVER, THE A.O. ; BRUSHED THIS ASIDE ON ME GROUNDS THAT THE IDENTITY ITSELF WAS NOT PROVED. THE A.O. FURTHER HELD THAT T HE GENUINENESS WAS NOT PROVED BECAUSE THESE PARTIES WERE NOT CREDIT WORTHY TO ADVANCE LOANS OF SUCH MAGNITUDE. I FIND THAT LOANS HAVE BEEN GIVEN BY CROSSED ACCOUNT- PAYEE CHEQUES/RTGS AND THEY ARE REFLECTED IN THEIR AUDITED BOOKS OF ACCOUNT AND FILED THEIR RETURNS OF INCOME INCLUDING BANK STATEMENTS FROM WHICH THE FUNDS HAVE BEEN GIVEN TO THE APPELLANT, T HIS FACT WAS ALSO ACCEPTED BY THE AO. THE APPELLANT HAS PRODUCED THE AUDITED ACCOUNTS AND RETURNS OF INCOME OF ALL THE PARRIES WHICH SHOW THAT THE LOANS GIVEN BY THEM TO THE ASSESSEE ARE REFLECTED IN THEIR AUDI TED ACCOUNTS. THESE PARTIES HAVE NOT BORROWED ANY FUNDS AND THUS THEY H AVE UTILIZED THEIR OWN FUNDS FOR GIVING LOANS TO THE ASSESSEE ON WHICH THEY HAVE INTEREST. I AM UNABLE TO APPRECIATE THIS POSITION OF THE A.O, THE A.O HIMSELF STATES THAT THE TURNOVER OF THESE PARTIES IS IN HUNDREDS O F CRORES. IN THE SAME ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 11 BREATH HE STATES THAT THESE PARTIES ARE NOT CREDIT WORTHY. I FIND THAT THE A,O HAS NO OTHER CORROBORATIVE EVIDENCE TO SHOW THA T CASH HAD BEEN PAID BY THE APPELLANT TO THESE PARTIES FOR AVAILING THE LOANS. AN ACCOMMODATION ENTRY OF THIS NATURE WOULD PERFORCE R EQUIRE THE APPELLANT TO PART WITH CASH IN HIS HANDS AND OBTAIN A CHEQUE IN LIEU OF THE SAME. THE A,O, HAS NOT BEEN ABLE TO ESTABLISH THE CASH TR AIL AT ALL. THE APPELLANT HAS FILED THE ENTIRE DOCUMENTS REQUIRED TO ESTABLIS H THE IDENTITY OF THE CREDITORS THEIR CREDITWORTHINESS, AS WELL AS THE GE NUINENESS OF THE TRANSACTION. THE SOURCE OF THE SAID LOANS THUS STAN DS PROVEN. AS HAS BEEN HELD IN SEVERAL DECISIONS OF SUPERIOR JUDICIAL AUTHORITIES (MURLIDHARLAHORIMAL V CIT [280 ITR 512 (GUJ)], LABH CHAND BOHRA V ITO [ 219 ITR 571 (RAJ)] AND CIT V DWARKADHISH INVESTMENT PRIVATE LIMITED [299 ITR 268 (DEL)], THE ASSESSES CANNOT BE CALLED UPON TO PROVE THE SOURCE OF THE SOURCE OF HIS LOANS. THE AO HAS RELIED AN A NUMBER OF JUDGMENTS, HOWEVER THE FACTS OF THESE JUDGMENTS ARE COMPLETELY DIFFERENT AS IN THIS CASE THE APPELLANT HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE LEN DER AND THE GENUINENESS OF THE TRANSACTIONS. AS THE LOANS HAVE BEEN SUBSEQUENTLY REPAID BY THE A PPELLANT THROUGH BANKING CHANNELS. THUS, THE APPELLANT IS AB LE TO PROVE THAT NOT ONLY DID HE TAKE GENUINE LOANS, BUT THE SAME HAS AL SO BEEN REPAID. IF THESE LOANS WERE NOT GENUINE, THEN THERE WOULD NOT HAVE BEEN A QUESTION OF REPAYMENT. I FIND THAT THE WEIGHT OF EVIDENCE IS IN FAVOUR OF THE APPELLANT AS HE HAS BEEN ABLE TO SATISFY ALL INGRED IENTS OF CASH CREDIT I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTIONS. ACCORDINGLY, I DELETE THE ADDITION OF RS, 5,51,00000/- AND INTERES T THEREON AMOUNTING TO RS.40,03,550/- TOTALING TO RS, 5,91 ,03,550/- MADE BY THE AO. 6. THE LD. DR SUBMITTED THAT THE LD.CIT(A) WAS ERRE D IN DELETING ADDITIONS MADE BY THE LD. AO TOWARDS UNSECURED LOAN S U/S 68 OF THE I.T.ACT, 1961, WITHOUT APPRECIATING THE FACT THAT T HE ASSESSE HAS FAILED TO PROVE THREE INGREDIENTS PROVIDED U/S 68 O F THE ACT. THE LD. DR FURTHER SUBMITTED THAT ALTHOUGH, THE LD. AO HAS BROUGHT OUT VARIOUS FACTS, IN LIGHT OF FINANCIAL STATEMENTS OF LOAN CREDITORS, INCLUDING THE MODUS OPERANDI, BUT, THE LD.CIT(A) HA S NEGATED ALL OBSERVATIONS OF THE LD. AO WITHOUT ASSIGNING ANY RE ASON, AS TO HOW THE ASSESSEE HAS SATISFIED, THE CONDITIONS PRESCRIB ED U/S 68 OF THE ACT. THE LD. DR, FURTHER SUBMITTED THAT THE LD.CIT( A) HAS ERRED IN DELETING ADDITIONS MADE BY THE LD. AO, IGNORING THE FACT THAT THE HONBLE SUPREME COURT, IN THE CASE OF SUMATI DAYAL VS CIT (1995) ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 12 214 ITR 801 CLEARLY HELD THAT BURDEN OF PROOF FOR ESTABLISHING THAT CASH CREDITS DOES NOT CONSTITUTES THE INCOME OF THE ASSESSEE COMPLETELY ON THE ASSESSEE AND THAT ASSESSEES EXPL ANATION WITH REGARD TO THE CASH CREDITS NEEDS TO BE CONSIDERED I N VIEW OF THE HUMAN PROBABILITIES. 7. THE LD. AR FOR THE ASSESSEE, AT THE OUTSET, SUBM ITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS COVERED BY THE DECISION OF ITAT, MUMBAI BENCH, IN THE CASE OF ASSESSEE SISTER CONCERNS, NAMELY M/S OM SHANTI REALTORS FOR AY 2013-14 IN IT A NO. 5615/MUM/2017, DATED 01/03/2019, WHERE AN IDENTICAL GROUND RAISED BY THE REVENUE AGAINST THE IDENTICAL ORDERS OF THE LD.CIT(A) HAS BEEN CONSIDERED BY THE TRIBUNAL AND AFTER CONSI DERING RELEVANT FACTS DELETED ADDITIONS MADE BY THE LD. AO. THE LD. AR, FURTHER SUBMITTED THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE CREDITORS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF FIVE LOAN CREDITORS BY FURNISHING VARIOUS INFORMATION, INCLUD ING THEIR NAME AND ADDRESS ALONG WITH COPY OF ITR FILED FOR THE RELEVA NT ASSESSMENT YEARS, BANK STATEMENTS AND FINANCIAL STATEMENTS OF LENDER COMPANIES TO PROVE SOURCE OF FUNDS TO EXPLAIN LOANS GIVEN TO THE ASSESSEE. THE LD.CIT(A) AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITIONS MADE BY THE LD. AO AND HIS ORDER SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW ALONG WITH CASE LAWS CITED BY BOTH THE PARTIES. AT THE OU TSET, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF ITAT, MUMBAI BENCH IN ASSESSEES SISTER CONCERN NAMELY M/S. OM SHANTI REALTORS VS ITO IN ITA NO. 56 15/ MUM/2017, ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 13 WHEREIN THE IDENTICAL GROUNDS RAISED BY THE REVENUE AGAINST IDENTICAL ORDER OF THE LD.CIT(A) HAS BEEN CONSIDERED AND AFTE R CONSIDERING RELEVANT FACTS, THE TRIBUNAL DELETED ADDITIONS MADE BY THE LD. AO. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 5. DECISION: I HAVE CONSIDERED THE FACTS OF THE CAS E, GROUNDS OF APPEAL AND ORAL AND WRITTEN SUBMISSIONS MADE BEFORE ME. AF TER A CAREFUL CONSIDERATION OF THE SAME AS WELL AS THE ASSESSMENT ORDER. ALL GROUNDS OF APPEAL ARE CORRELATED THEREFORE I DEALT TOGETHER FOR SAKE OF CONVENIENCE. I PROCEED TO RULE AS UNDER. 5.1 FROM THE ASSESSMENT ORDER I FIND THAT A.O. MADE ADDITION U/S. 68 LOAN TAKEN FROM FOLLOWING 8PARTIES VIZ. DIVYANSHI GEMS P . LTD. RS, 3,09,00,000/- I-, MANBHAWAN EXIM P. LTD. RS, 2,00,0 0,000/-, SIDDHAM GEMS P. LTD. RS. 37,00,000/- RADHEY KRISHNA GEMS. P . LTD. RS. 1,29,00,000/-, SHRI BRAHMA SHAKTI GEMS P. LTD. RS. 1,50,00,0001-. SHANKESHWAR DIAMONDS P. LTD. RS. 2,27,00,000/-, SHR I CHARBHUJA DIAMONDS P. LTD. RS. 2,10,00,000/- AND SHRI JAGDAMB A SHAKTI GEMS P. LTD. RS. 1,68,00,000 TOTALING TO RS.14,30,00,000/-. THE ADDITION HAS BEEN DONE BY TREATING THE SAME AS UNEXPLAINED CASH CREDI T STATING THAT LENDERS ARE NOT GENUINE BECAUSE APPELLANT REMAIN FAILED TO PRODUCE THE PARTIES BEFORE THE A.O. FOR VERIFICATION AND IDENTITY OF T HE LENDERS AND CREDITWORTHINESS WAS NOT PROVIDED BY THE APPELLANT. THE AO CAME TO THE CONCLUSION THAT AS THE DECLARED INCOME BY THE RESPE CTIVE LOAN CREDITORS WAS LESS THEY WERE NOT CAPABLE OF LENDING WHICH HAS BEEN DONE BY IGNORING THE FACT THAT THEY HAD SUBSTANTIAL TURNOVE R AND HAD A VERY LARGE BASE OF ASSETS AS EVIDENT IN THE RESPECTIVE BALANCE SHEET. 5.2 I FIND FROM THE ASSESSMENT ORDER OF THE A.O., I N PARA 4.2 IT HAS BEEN STATED THAT 'ASSESSEE HAS FILED CONFIRMATIONS OF TH E ABOVE LOAN PARTIES ALONGWITH COPY OF ITR AND RELEVANT PAGE OF THE BANK STATEMENT'. DURING THE ASSESSMENT PROCEEDINGS NOTICE U/S. 133(6) OF 2 PARTIES VIZ BRAHM SHAKTI GEMS PVT.LTD. AND SHREE CHARBHUJA DIAMONDS P VT. LTD. WAS RETURNED FROM POSTAL AUTHORITIES WITH REMARK 'LEFT' . AS IT CAME TO NOTICE TO THE APPELLANT, HE PRODUCED THE NEW ADDRESS OF THE A LL LENDERS FROM WHOM NOTICES RETURN UNSERVED. I FIND FROM PARA 4.5 OF TH E ASSESSMENT ORDER WHEREIN AO HERSELF ACCEPTED THAT FINALLY ALL THE LE NDERS FILED CONFIRMATIONS. THE SAME EXTRACT IS AS UNDER: '4.5 THEREAFTER IN THIS CASE COMPLIANCE HAS BEEN MA DE BY ALL THE LENDERS OF LOAN BY SPEED POST FROM THE NEW BUSINESS ADDRESS . 5.3 I COME ON THE ISSUE OF COMMISSION ISSUED BY TH E ANOTHER AO TO DDIT (INV.), SURAT. THE AO RECEIVED INFORMATION THAT IT O-20(3)(1),MUMBAI ISSUED COMMISSION TO DDIT, SURAT U/S. 131(1)(D) TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF LENDERS. THE DD IT(INV.), SURAT SUBMITTED REPORT STATING THAT HE HAS ISSUED SUMMONS U/S. 131 FOR APPEARANCE BUT DUE TO CLOSE PREMISES SUMMONS COULD NOT BE SERVED, ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 14 THEREFORE SUMMONS WERE SERVED BY AFFIXTURE BUT LOAN CREDITORS NOT RESPONDED. IN THIS CASE THREE PARTIES VIZ. SHREE CH ARBHUJA DIAMONDS PVT, LTD, SHANKESHWAR DIAMONDS PVT. LTD AND RADHY KRISHN A GEMS PVT. LTD. ARE RELATED TO THE PARTIES TO WHOM COMMISSION WAS I SSUED IN OTHER CASE. I FIND THAT REGISTERED OFFICE OF THESE LENDERS HAVE B EEN CHANGED. BEFORE ME APPELLANT SUBMITTED THAT CHANGED ADDRESS OF THE LEN DERS WERE PROVIDED TO THE AO DURING THE PROCEEDINGS. APPELLANT FILED BEFO RE ME PROOF OF CHANGE OF ADDRESS IN FORM OF FORM NO. 18/FORM NO. INC-22 W HICH IS THE NOTICE OF SITUATION OR CHANGE OF SITUATION OF REGISTERED OFFI CE PURSUANCE TO SECTION 146 OF THE COMPANIES ACT 1956/ SECTION 12(2) & 4 OF THE COMPANIES ACT, 2013 AND RULE 25 AND 27 OF THE COMPANIES (INCORPORA TION) RULES 2014. ON VERIFICATION OF THE SAME IT IS NOTICED THAT IN S R. NO. 4 IT IS CLEARLY MENTIONED 'NOTICE IS HEREBY GIVEN THAT (A) THE ADDR ESS OF THE REGISTERED OFFICE OF THE COMPANY WITH EFFECT FROM PARTICULARS OF THE DETAILS ARE AS UNDER: SR. NAME OF THE COMPANY CHANGE ADDRESS WITH EFFECT FROM 1 SHREE CHARBHUJA DIAMONDS PVT. LTD H. NO. 5/909, 3RD FLOOR GANSESH ASHISH GHIYA SHERI, KAMNATH ROAD MAHIDHARPURA SURAT GUJRAT- 395003 01/07/2013 2 SHANKESHWAR GEMS P. 6/2497, MAZE NINE FLOOR, OFFICE NO.21/08/2014 LTD M3 BALAJI SADAN LIMBU SHERI, MAHIDHARPURA SURAT 395003 21.08.14 3 RADHEY KRISHNA GEMS 6/1766 SAINATH BUILDING, GUNDI SHERI MAHAPURA SURAT, GUJRAT- 395003 29.04.13 ALL THE LENDERS ARE PVT. LTD. CO. ARE REGISTERED UN DER COMPANIES ACT . ALL THE DETAILS OF COMPANY ARE AVAILABLE ON PUBLIC DOMA IN. ON THE ABOVE FACT I COME TO THE CONCLUSION THAT THE DDIT(INV.), SURAT HAS NOT MADE ADEQUATE ENQUIRY NOR ANY ADEQUATE REPORT IS TAKEN O N RECORD BY AO. ONLY ON THE BASIS OF THE PREMISES CLOSED ON ONE DAY OR N OTICES RETURNED FROM THE POSTAL AUTHORITY IT CANNOT BE ACCEPTABLE THAT P ARTIES FROM WHOM THE ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 15 LOANS WERE TAKEN ARE NOT IN EXISTENCE OR THEY ARE B OGUS. THE DDIT(INV.) SURAT ISSUED /SERVED NOTICE ON THE OLD ADDRESS WHIC H HAVE BEEN CHANGED. THEREFORE COMPLIANCE OF SUMMONS ISSUED BY HIM COULD NOT BE MADE. FINALLY ALL THE CONFIRMATION AND DETAILS CALLED FOR WAS PROVIDED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS BEFORE ME. IT IS ALSO PERTINENT TO NOTE THAT IN THIS CASE NO COMMISSION WAS ISSUED TO THE D DIT(INV.) SURAT. AS NO COMMISSION WAS ISSUED IN THIS CASE AND APPELLANT PR OVIDED THE CHANGE OF ADDRESS OF THE PARTIES DURING THE ASSESSMENT PROCEE DINGS, THIS CONTENTION WAS ALSO ACCEPTED BY THE AO IN HIS ORDER , THEN AO SHOULD HAVE MADE ENQUIRY FOR THE SAME BUT HE DID NOT DO SO . 5.4 BEFORE ME AS WELL AS THE A.O. ALSO DOCUMENTS WERE PRODUCED BY THE PARTIES TO PROVE THE GENUINENESS OF THE TRANSAC TIONS WHICH INTER ALIA INCLUDED THE CONFIRMATIONS, BANK STATEMENTS OF LEND ERS, ACKNOWLEDGEMENTS, ROL, FROM THESE PARTIES, THEIR BA LANCE SHEETS, PROFIT AND LOSS ACCOUNTS, STATEMENTS OF ADVANCES WHICH INC LUDED NAME OF THE APPELLANT AS BORROWER IN TWO CASES AND DETAILS OF I NTEREST AND PRINCIPAL REPAID WHICH WERE BY PAYEES ACCOUNT CHEQUES/RTGS. T HE APPELLANT HS FILED DETAILS FROM THE RECORDS OF MINISTRY OF CORPO RATE AFFAIRS WHICH ALSO SHOWS THAT LENDER COMPANIES ARE ALIVE. MOREOVER, TH E APPELLANT HAS NOT COMMENCED THE CONSTRUCTION OR DONE ANY BOOKING TO G ENERATE ANY FUNDS. HOWEVER, THE A.O. BRUSHED THIS ASIDE ON THE GROUNDS THAT THE IDENTITY ITSELF WAS NOT PROVED. THE A.O. FURTHER HELD THAT T HE GENUINENESS WAS NOT PROVED BECAUSE THESE PARTIES WERE NOT CREDIT WORTHY TO ADVANCE LOANS OF SUCH MAGNITUDE. I FIND THAT LOANS HAVE BEEN GIVEN B Y CROSSED ACCOUNT- PAYEE CHEQUES/RTGS AND THEY ARE REFLECTED IN THEIR AUDITED BOOKS OF ACCOUNT AND FILED THEIR RETURNS OF INCOME INCLUDING BANK STATEMENTS FROM WHICH THE FUNDS HAVE BEEN GIVEN TO THE APPELLANT, T HIS FACT WAS ALSO ACCEPTED BY THE AO. THE APPELLANT HAS PRODUCED THE AUDITED ACCOUNTS AND RETURNS OF INCOME OF ALL THE PARTIES WHICH SHOW THAT THE LOANS GIVEN BY THEM TO THE ASSESSEE ARE REFLECTED IN THEIR AUDI TED ACCOUNTS. THESE PARTIES HAVE NOT BORROWED ANY FUNDS AND THUS THEY H AVE UTILISED THEIR OWN FUNDS FOR GIVING LOANS TO THE ASSESSEE ON WHICH THEY HAVE EARNED INTEREST. 5.5 1 AM UNABLE TO APPRECIATE THIS POSITION OF THE A.O. THE A.O HIMSELF STATES THAT THE TURNOVER OF THESE PARTIES IS IN HUN DREDS OF CRORES. IN THE SAME BREATH HE STATES THAT THESE PARTIES ARE NOT CR EDIT WORTHY. I FIND THAT THE A.O HAS NO OTHER CORROBORATIVE EVIDENCE TO SHOW THAT CASH HAD BEEN PAID BY THE APPELLANT TO THESE PARTIES FOR AVAILING THE LOANS. AN ACCOMMODATION ENTRY OF THIS NATURE WOULD PERFORCE R EQUIRE THE APPELLANT TO PART WITH CASH IN HIS HANDS AND OBTAIN A CHEQUE IN LIEU OF THE SAME. THE A.O. HAS NOT BEEN ABLE TO ESTABLISH THE CASH TR AIL AT ALL. THE APPELLANT HAS FILED THE ENTIRE DOCUMENTS REQUIRED TO ESTABLIS H THE IDENTITY OF THE CREDITORS THEIR CREDITWORTHINESS, AS WELL AS THE GE NUINENESS OF THE TRANSACTION. THE SOURCE OF THE SAID LOANS THUS STAN DS PROVEN. AS HAS BEEN HELD IN SEVERAL DECISIONS OF SUPERIOR JUDICIAL AUTHORITIES {MURLIDHARLAHORIMA! V CIT [280 ITR 512 (GUJ)] , LAB HCHAND BOHRA V ITO [ 219 ITR 571 (RAJ)] AND CIT V DWARKADHISH INVESTMENT PRIVATE LIMITED ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 16 [299 ITR 268 (DEL)], THE ASSESSEE CANNOT BE CALLED UPON TO PROVE THE SOURCE OF THE SOURCE OF HIS LOANS. 5.7 THE AO HAS RELIED ON A NUMBER OF JUDGEMENTS, HO WEVER THE FACTS OF THESE JUDGEMENTS ARE COMPLETELY DIFFERENT AS IN THI S CASE THE APPELLANT HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE LENDER AND THE GENUINENESS OF THE TRANSACTIONS. 5.8 AS THE LOANS HAVE BEEN SUBSEQUENTLY REPAID BY T HE APPELLANT THROUGH BANKING CHANNELS. THUS, THE APPELLANT IS ABLE TO PR OVE THAT NOT ONLY DID HE TAKE GENUINE LOANS, BUT THE SAME HAS ALSO BEEN R EPAID. IF THESE LOANS WERE NOT GENUINE, THEN THERE WOULD NOT HAVE BEEN A QUESTION OF REPAYMENT. I FIND THAT THE WEIGHT OF EVIDENCE IS IN FAVOUR OF THE APPELLANT AS HE HAS BEEN ABLE TO SATISFY ALL INGREDIENTS OF CASH CREDIT I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. A CCORDINGLY, I DELETE THE ADDITION OF RS. 14,30,00,000/- AND INTEREST THE REON AMOUNTING TO RS.1,13,74,600/- TOTALING TO RS. 15,43,74,600/- MAD E BY THE A.O 7. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESE NT CASE AND PERUSAL OF THE DOCUMENTS AND AFTER HEARING BOTH PARTIES AT LEN GTH WE FIND THAT THE ASSESSEE HAD ALREADY PLACED ON RECORD ALL THE DOCUM ENTARY EVIDENCES IN ORDER TO SHOW THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS AND GENUINENESS OF THE TRANSACTIONS. WE HAVE PERUSED TH E CONFIRMATION FILED BY THE PARTIES, COPIES OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY THE LENDERS FOR THE YEAR UNDER CONSIDERATION, COPIE S OF THE BANK STATEMENT OF LENDERS, WHICH ESTABLISH THAT THE PAYM ENT TOWARDS LOANS WERE RECEIVED DURING THE YEAR UNDER CONSIDERATION. THEREFORE THE IDENTITY OF THE LENDERS WAS NOT IN DISPUTE. WE HAVE ALSO CON SIDERED ALL THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE IN THE S HAPE OF STATEMENT OF ACCOUNTS AND DOCUMENTS TO SHOW THAT THE TRANSACT IONS WERE CARRIED OUT THROUGH BANKING CHANNELS AND THE CONFIRMATIONS WHICH WERE FILED IN THE FORM OF LEDGER ACCOUNTS WHICH REFLECT THAT THE ASSESSEE HAD RECEIVED THE AMOUNT THROUGH RTGS. ALL THOSE DOCUMENTS PROVE THE GENUINENESS OF THE TRANSACTIONS. NOW AS FAR AS CREDITWORTHINESS OF THE LENDERS ARE CONCERNED, WE HAVE PERUSED THE AUDITED ACCOUNTS OF THE LENDERS WHICH SHOWS THE CREDITWORTHINESS OF THE LENDERS TO GRANT LOANS AND ADVANCES. FURTHER, WE ALSO NOTICED FROM THE RECORDS THAT LD. CIT(A) HAD RIGHTLY POINTED OUT IN ITS ORDER THAT THE AO MADE THE ADDIT IONS BY HOLDING THAT AS THE DECLARED INCOME BY THE RESPECTIVE LOAN CREDITOR S WAS LESS, THEREFORE, THEY WERE NOT CAPABLE OF LENDING. HOWEVER, THE AO I GNORED THE FACT THAT THE LENDERS HAD SUBSTANTIAL TURNOVER AND HAD A VERY LARGE BASE OF ASSETS AS IS REFLECTED IN THE RESPECTIVE BALANCE SHEETS. 8. WE HAVE ALSO CONSIDERED THE FACT THAT IN THE PRE SENT CASE, THE AO HERSELF HAD ACCEPTED THAT ALL THE LENDERS HAD FILED THEIR CONFIRMATIONS APART FROM OTHER DOCUMENTS AS MENTIONED ABOVE. THE RECORD OF MINISTRY OF CORPORATE AFFAIRS WAS ALSO PLACED ON RECORD TO S HOW THAT THE LENDER COMPANIES ARE ALIVE. THE LOANS, WHICH WERE TAKEN BY THE ASSESSEE HAD ALSO BEEN REPAID AND THOSE DETAILS HAVE ALSO BEEN FILED BY THE ASSESSEE. IN THE CASE OF PR.CIT VS. PARADISE INLAND SHIPPING PVT. LTD . (SUPRA) THE HON'BLE HIGH COURT HAS CATEGORICALLY HELD THAT THE INITIAL ONUS IS UPON THE ASSESSEE TO PLACE ON RECORD ALL THE DOCUMENTARY EVI DENCES TO ESTABLISH ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 17 THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS AN D GENUINENESS OF THE TRANSACTIONS AND WHEN ONCE THE ASSESSEE PRODUCE ALL THE DOCUMENTARY EVIDENCES TO ESTABLISH THE EXISTENCE OF THE SAID LE NDERS THEN THE BURDEN SHIFTS ON THE REVENUE TO ESTABLISH THE CASE. SIMILA R VIEW WAS ALSO TAKEN BY THE HON'BLE HIGH COURT IN THE CASE OF CIT VS. GREEN INFRA LTD . (SUPRA) WHEREIN IT WAS HELD AS UNDER: - ' SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT (SHARE C APITAL) - ASSESSMENT YEAR 2011-12 - ASSESSEE-COMPANY OFFERED TO SELL ITS SHARES - IDENTITY OF SUBSCRIBERS WAS CONFIRMED BY VIRTUE O F ASSESSING OFFICER ISSUING NOTICES TO THEM - GENUINENESS OF ENTIRE TRA NSACTION WAS RECORDED IN BOOKS OF ACCOUNT AND REFLECTED IN FINANCIAL STAT EMENTS OF ASSESSEE- COMPANY SINCE SUBSCRIPTION WAS DONE THROUGH BANKING CHANNELS AS EVIDENCED BY BANK STATEMENTS - TRIBUNAL EXAMINED CA SE OF REVENUE ON PARAMETERS OF SECTION 68 AND FOUND ON FACTS THAT IT WAS NOT HIT BY SAID SECTION - WHETHER SINCE REVENUE WAS NOT ABLE TO SH OW THAT FACTUAL FINDING RECORDED BY TRIBUNAL WAS PERVERSE, NO SUBST ANTIAL QUESTION OF LAW AROSE - HELD, YES [PARA 3(C)] [IN FAVOUR OF ASSESSE E].' 9. IN THE CASE OF CIT VS. GAGANDEEP INFRASTRUCTURE PVT. LTD . (SUPRA) THE HON'BLE HIGH COURT HELD AS UNDER: - ' SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT (SHARE C APITAL) - ASSESSMENT YEAR 2008-09 - WHETHER PROVISO TO SECTION 68 INTRODUCED BY FINANCE ACT 2012 WITH EFFECT FROM 1-4-2013, WOULD NOT HAVE RETROSPECTIVE EFFECT - HELD, YES - WHETHER WHERE AS SESSEE-COMPANY HAD ESTABLISHED IDENTITY, GENUINENESS AND CAPACITY OF S HAREHOLDERS WHO HAD SUBSCRIBED TO ITS SHARES, ASSESSING OFFICER WAS NOT JUSTIFIED IN ADDING AMOUNT OF SHARE CAPITAL SUBSCRIPTION AS UNEXPLAINED CREDIT - HELD, YES - WHETHER WHERE REVENUE URGED THAT ASSESSEE HAD RECEI VED SHARE APPLICATION MONEY FROM BOGUS SHAREHOLDERS, IT WAS F OR INCOME-TAX OFFICERS TO PROCEED BY REOPENING ASSESSMENT OF SUCH SHAREHOLDERS AND ASSESSING THEM TO TAX IN ACCORDANCE WITH LAW AND IT DID NOT ENTITLE REVENUE TO ADD SAME TO ASSESSEE'S INCOME AS UNEXPLA INED CASH CREDIT - HELD, YES [PARA 3] [IN FAVOUR OF ASSESSEE].' 10. AS FAR AS THE FACTS OF THE PRESENT CASE, ASSESS EE HAS ALSO REPAID THE LOAN WHICH WAS TAKEN TO THE LENDERS THROUGH BANKING CHANNEL AND IN SUCH A SITUATION THE HON'BLE HIGH COURT IN THE CASE OF R AHUL VINEET TRADERS (SUPRA) HAS HELD AS UNDER: - ' SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS [LOAN] - ASSESSMENT YEAR 2000-01 - ASSESSEE-FIRM HAD TAKEN L OAN FROM 14 FIRMS OUT OF WHICH LOAN FROM FOUR FIRMS WERE NOT FOUND BY ASSESSING OFFICER AS GENUINE BECAUSE THOSE FIRMS WERE, ALLEGEDLY, RELATE D TO ONE G INVOLVED IN PROVIDING ACCOMMODATION ENTRIES - ASSESSING OFFI CER THUS INVOKED SECTION 68 AND MADE ADDITION TO ASSESSEE S INCOME ON ACCOUNT OF UNEXPLAINED CASH CREDITS - COMMISSIONER NOTICED THAT LENDERS WERE REGULAR INCOME- TAX ASSESSEE AND THEIR PANS WERE ON RECORD - IT WAS ALSO UNDISPUTED THAT AMOUNT HAD BEEN ADVANCED THROU GH ACCOUNT PAYEE CHEQUES AND FURTHER BEFORE ISSUING CHEQUES LENDERS HAD GOT SUFFICIENT BALANCE IN THEIR ACCOUNT - MOREOVER, AMOUNT HAD ALS O BEEN REPAID THROUGH ACCOUNT PAYEE CHEQUES - IN VIEW OF ABOVE, C OMMISSIONER ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 18 (APPEALS), TAKING A VIEW THAT LOAN TRANSACTIONS WER E GENUINE, DELETED ADDITION MADE BY ASSESSING OFFICER - TRIBUNAL UPHEL D ORDER OF COMMISSIONER (APPEALS) - WHETHER ON FACTS, IMPUGNED ADDITION MADE IN HANDS OF ASSESSEE WAS RIGHTLY DELETED - HELD, YES [PAPA 5] [IN FAVOUR OF ASSESSEE].' 11. IN THE CASE OF VARINDER RAWLLEY (SUPRA) THE HON 'BLE HIGH COURT HAS HELD AS UNDER: - ' SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDIT (SALE OF GOODS) - ASSESSMENT YEAR 2002-23 - WHETHER WHERE ASSESSEE RE CEIVED AND RETURNED AMOUNT IN QUESTION BY WAY OF ACCOUNT PAYEE CHEQUES AND TRANSACTIONS WERE REFLECTED IN BANK ACCOUNTS OF ASS ESSEE AS WELL AS CREDITOR WHO WAS AN INCOME-TAX ASSESSEE, ASSESSEE H AD SUFFICIENTLY EXPLAINED NATURE AND SOURCE OF CREDIT ENTRY AND IN SUCH CASE ENTRY COULD NOT BE TREATED ASS ASSESSEE S INCOME WHEN DEPARTMENT FAILED TO PROVE TO CONTRARY - HELD, YES [PARAS 9 AND 10] [IN FAVOUR OF ASSESSEE].' IN THE CASE OF APEX THERM PACKAGING (P) LTD. (SUPRA ) THE HON'BLE HIGH COURT HAS CATEGORICALLY HELD THAT WHEN THE ASSESSEE HAD PLACED ON RECORD FULL PARTICULARS, WHICH ARE INCLUSIVE OF CON FIRMATION WITH NAME, ADDRESS AND PAN, COPY OF INCOME TAX RETURNS, BALANC E SHEET, ETC. IN RESPECT OF ALL CREDITORS/LENDERS THEN REVENUE IS NO T JUSTIFIED IN MAKING ADDITIONS. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HON'BLE ALLAHABAD HIGH COURT IN THE OF VIJAY KUMAR JAIN (SUPRA) AND T HE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF JAI KUMAR BAKLIWAL (SUPRA ) AND ALSO IN THE CASE OF ITO VS. VIJAY DWELLERS PVT. LTD. IN ITA NO.141/M UM/2018' FOR A.Y. 2009-10 DATED 30.01.19, ITO VS. LOTUS GRIH NIRMAN P VT. LTD. ITA NO.3998/MUM/2014 FOR A.Y. 2010-11 DATED 18.10.2018, ITO VS. SHRI NEMICHAND LA LCHAND JAIN ITA NO.159/MUM/2017 FOR A.Y. 2007-08 DATED 17.12.2018, SHRI VASANT RAMJI SAVLA VS. ACIT IN ITA NO.6123/MUM/2017 FOR A.Y. 201 1-12 DATED 27.12. 2018, ACIT VS. RAJESH M. SHAH (HUF) ITA NO .7105/MUM/2016 FOR A.Y. 2012-13 DATED 30.08.2018 AND M/S. KEYNOTE FINCORP LIMITED VS. DCIT IN ITA NOS. 1643 & 1647/MUM/2018 FOR A.YS. 2012-13 AND 2013- 14 DATED 5.11.2018. 12. IN THE PRESENT CASE, LD. CIT(A) APART FROM APPR ECIATING THAT ALL THE DOCUMENTS HAD BEEN PLACED ON RECORD BY THE ASSESSEE , WHICH IS SPECIFICALLY MENTIONED IN PARA NO. 5.4 OF ITS ORDER HAD ALSO CATEGORICALLY MENTIONED THAT THE AUDITED ACCOUNTS AND RETURN OF I NCOME OF ALL THE PARTIES, SHOW THAT THE LOANS GIVEN BY THEM TO THE A SSESSEE WERE REFLECTED IN THEIR AUDITED ACCOUNTS AND THESE PARTIES HAD NOT BORROWED ANY FUNDS AND THUS HAD UTILISED THEIR OWN FUNDS FOR GIVING L OANS TO THE ASSESSEE ON WHICH THEY HAD EARNED INTEREST. IT IS ALSO IMPORTAN T TO MENTION HERE THAT THE A.O HIMSELF STATED THAT THE TURNOVER OF THESE P ARTIES WAS IN HUNDREDS OF CRORES AND AT THE SAME TIME, AO STATED THESE PAR TIES WERE NOT CREDIT WORTHY. IN THIS RESPECT, THE A.O HAD NOT PLACED ON RECORD ANY CORROBORATIVE EVIDENCE TO SHOW THAT CASH HAD BEEN P AID BY THE ASSESSEE TO THESE PARTIES FOR AVAILING THE LOANS AND HAD NOT BEEN ABLE TO ESTABLISH THE CASH TRAIL AT ALL. ON THE CONTRARY, THE ASSESSE E HAD FILED THE ENTIRE DOCUMENTS, REQUIRED TO ESTABLISH THE IDENTITY OF TH E CREDITORS AND THEIR CREDITWORTHINESS, AS WELL AS THE GENUINENESS OF THE TRANSACTION. ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 19 13. AS FAR AS THE CASE LAW RELIED UPON BY THE REVEN UE IS CONCERNED, WE HAVE CONSIDERED THOSE CASE LAW, BUT THEY ARE NOT AP PLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS THE PARI M ATERIA CONTAINED IN THOSE CASES ARE DIFFERENT FROM THE PARI MATERIAL CO NTAINED IN THE PRESENT CASE. 14. WE ALSO NOTICED THAT LD. CIT(A) HAD RIGHTLY CON CLUDED THAT THE LOANS TAKEN BY THE ASSESSEE WERE SUBSEQUENTLY REPAID THRO UGH BANKING CHANNELS. THUS, IF THESE LOANS WERE NOT GENUINE THE N IN THAT EVENTUALITY THE SAME WOULD NOT HAVE BEEN REPAID. THEREFORE, CON SIDERING THE ENTIRTIY OF THE FACTS, THE LD. CIT(A) HAD RIGHTLY HELD THAT THE ASSESSEE HAD SATISFIED ALL THE INGREDIENTS OF CASH CREDIT I.E. I DENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS AND ACCORDINGLY DEL ETED THE ADDITIONS. 15. MOREOVER, NO NEW FACTS OR CONTRARY JUDGMENTS HA VE BEEN BROUGHT ON RECORD BEFORE US IN ORDER TO CONTROVERT OR REBUT TH E FINDINGS SO RECORDED BY LD CIT (A). THEREFORE, THERE ARE NO REASONS FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT ( A). HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED B Y THE LD. CIT (A) ARE JUDICIOUS AND ARE WELL REASONED. RESULTANTLY, THESE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 16. IN THE NET RESULT, THE APPEAL FILED BY THE REVE NUE STANDS DISMISSED WITH NO ORDER AS TO COST. 9. WE FURTHER NOTED THAT THE LD.CIT(A) AFTER CONSID ERING RELEVANT DETAILS FILED BY THE ASSESSEE, IN RESPECT OF ALL FI VE LOAN CREDITORS HAS CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHA RGED THE ONUS CAST UPON IT U/S 68 OF THE I.T.ACT, 1961, BY FILING VARIOUS DETAILS, INCLUDING CONFIRMATION LETTERS FROM THE PARTIES. WE , FURTHER NOTED THAT THE LD.CIT(A) HAD ALSO RECORDED CATEGORICAL FINDING S THAT THE LD. AO HAS DISREGARDED ALL EVIDENCES FILED BY THE ASSESSEE ONLY ON THE GROUND THAT NOTICE ISSUED U/S 133(6) WERE RETURN UN SERVED, IN RESPECT OF SOME PARTIES, WITHOUT APPRECIATING THE F ACT THAT ON SUBSEQUENT EVENT ALL THE LENDER COMPANIES HAD REPLI ED TO THE NOTICES OF THE LD. AO ISSUED U/S 133(6) BY FURNISHI NG DOCUMENTARY EVIDENCES, IN RESPECT OF EACH OF THE ISSUES RAISED THEREIN. FURTHER, THE ASSESSEE HAD ALSO FURNISHED BANK STATEMENT TO P ROVE TRANSFER OF LOANS THROUGH PROPER BANKING CHANNEL. THE ASSESSEE FIRM HAD PAID ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 20 INTEREST ON SAID LOANS AFTER DEDUCTING TDS APPLICAB LE AS PER LAW. THE ASSESSEE FIRM HAD ALSO REPAID SAID LOANS BY CRO SSED ACCOUNT PAY CHEQUES IN THE SUBSEQUENT ASSESSMENT YEARS AND THE DETAILS THEREOF HAVE BEEN FILED IN FORM OF A CHART, WHICH I S AT PAGES NO. 59 TO 63 OF THE PAPER BOOK. THEREFORE, WE ARE OF THE C ONSIDERED VIEW THAT WHEN, THE ASSESSEE HAS DISCHARGED ITS ONUS BY FILING NECESSARY EVIDENCES TO PROVE IDENTITY, GENUINENESS OF TRANSAC TIONS AND CREDITWORTHINESS OF THE PARTIES, THE LD. AO CANNOT MAKE ADDITIONS TOWARDS UNSECURED LOANS ONLY ON THE BASIS OF NON SE RVICE OF 133(6) NOTICES OR NON COOPERATION OF LENDERS TO SAID NOTIC ES ISSUED BY THE LD. AO, BECAUSE, THE APPEARANCE OF PARTIES TO NOTIC ES ISSUED BY THE LD. AO IS NOT WITHIN THE CONTROL OF THE ASSESEE. TH E ASSESSEE AT BEST COULD FILE NECESSARY EVIDENCES TO PROVE TRANSACTION S BETWEEN THE PARTIES AS GENUINE, BUT AT THE SAME TIME NON APPEA RANCE OF PARTIES CANNOT BE ATTRIBUTED TO THE FAILURE OF THE ASSESSE TO HOLD THAT TRANSACTIONS BETWEEN THE PARTIES ARE NON GENUINE. T HEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LD. AO WAS ERRED IN MAKING ADDITIONS TOWARDS UNSECURED LOANS TAKEN FROM FIVE PARTIES U/S 68 OF THE I.T.ACT, 1961. THE LD.CIT(A) AFTER CONSIDERING RELEVANT FACT S HAS RIGHTLY DELETED ADDITIONS ALONG WITH INTEREST PAID THEREON. 10. COMING BACK TO VARIOUS CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF PCIT VS PARADISE INLAND SHIPPING PVT.LTD. (2018) 400 ITR 439. WE FIND THAT THE HON BLE JURISDICTIONAL HIGH COURT HAS EXAMINED A SIMILAR ISSUE IN LIGHT OF PROVISION OF SECTION 68 AND HELD THAT ONCE, ASSESSEE HAS DISCHAR GE ITS ONUS BY FILING NECESSARY EVIDENCES, INCLUDING NAME AND ADDR ESS OF ALLEGED SHAREHOLDERS, THEN THE REVENUE IS FREE TO PROCEED O N LOAN CREDITORS IN ACCORDANCE WITH LAW, BUT SUM SO RECEIVED FROM LO AN CREDITORS ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 21 CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESEE. THE ABOVE DECISION OF HONBLE BOMBAY HIGH COURT HAS BEE N AFFIRMED BY THE HONBLE SUPREME COURT, THEREBY CONCURRED WITH T HE FINDINGS OF THE HONBLE HIGH COURT. FURTHER, THE HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT VS GREEN INFRA LTD. (2017) 392 ITR 7 AND CIT VS. GAGANDEEP INFRASTRUCTURE LTD. (2017) 394 ITR 680 HA D TAKEN SIMILAR VIEW AND HELD THAT ONCE, THE ASSESSEE DISCHARGES IT S ONUS BY FILING NECESSARY EVIDENCES, INCLUDING NAME AND ADDRESS OF CREDITORS, THEN THE DEPARTMENT CAN REOPEN THE ASSESSMENT OF CREDITO RS AND PROCEED IN ACCORDANCE WITH LAW, BUT SUM SO RECEIVED FROM TH E CREDITORS CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASS ESEE. A SIMILAR VIEW HAS BEEN UPHELD BY THE HONBLE ALLAHABAD HIGH COURT, IN THE CASE OF CIT VS RAHUL VINEETH TRADERS 2014 41 TAXMAN N.COM 86. THE HONBLE PUNJAB & HARYANA COURT, IN THE CASE OF CIT VS VARINDER RAWALLEY 2014 366 ITR 233 HAD TAKEN SIMILAR VIEW. 11. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOL LOWING THE CASE LAWS DISCUSSED HEREINABOVE, INCLUDING THE COORDINAT E BENCH OF ITAT, MUMBAI BENCH DECISION IN ASSESSEES SISTER CONCERNS CASE NAMELY M/S. OM SHANTI REALTORS IN ITA NO.5615/MUM/2017, WE ARE OF THE CONSIDERED VIEW THAT THE LD. AO WAS ERRED IN MAKING ADDITIONS TOWARDS UNSECURED LOAN AND CONSEQUENT INTEREST PAID THEREON U/S 68 OF THE I.T.ACT, 1961. THE LD.CIT(A) AFTER CONSIDERI NG RELEVANT FACTS AND ALSO BY RELIED UPON VARIOUS JUDICIAL PRECEDENTS HAS RIGHTLY DELETED ADDITIONS MADE BY THE LD. AO. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD.CIT(A) AND DISMISSED APPEAL FILED BY THE REVENUE. 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ITA NOS.5613 &5614/MUM/2017 OM SHANTI RESIDENCY 22 ITA NO. 5614/MUM/2017 13. THE FACTS AND ISSUES INVOLVED IN THE PRESENT AP PEAL ARE IDENTICAL TO THE FACTS AND ISSUES, WHICH WE HAD CON SIDERED IN ITA NO.5613/MUM/2017. THE REASONS GIVEN BY US IN PRECED ING PARAGRAPH SHALL MUTATIS-MUTANDIS APPLY TO THIS APPEAL AS WELL. THEREFORE, FOR SIMILAR REASONS RECORDED IN ITA NO. 5613/MUM/2017, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WA S RIGHT IN DELETING ADDITIONS MADE BY THE LD. AO TOWARDS UNSE CURED LOANS AND CONSEQUENT INTEREST PAID THEREON U/S 68 OF THE I.T.ACT,1961. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF TH E LD.CIT(A) AND DISMISSED APPEAL FILED BY THE REVENUE. 14. AS A RESULT, BOTH APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 /01 /2020 SD/- (C.N.PRASAD) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 10/01/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//